Chiron Corp. reported Monday a first-quarter loss of about $386million, or $9.64 per share, due mostly to charges related to itspartnership with Ciba-Geigy Ltd.

The partnership deal, completed Jan. 4, involved Ciba taking a 49.9percent stake in Chiron, which then took $270 million in first-quartercharges for its acquisition of Ciba Corning and Ciba's interests inThe Biocine Co. and Biocine S.p.A.

Another $27 million charge was taken for Chiron's purchase of theIOLAB surgical division from Johnson & Johnson in March. AndChiron spent $21 million to idle its manufacturing facility in PuertoRico and scale back elsewhere.

The Emeryville, Calif., company had revenues of $218 million forthe quarter. A year ago Chiron reported a net income of $4.8 million,or 14 cents per share, on revenues of $91 million.

Much of the revenue increase is attributed to increased product sales,resulting from the purchase of Ciba Corning, which had $120 millionin first-quarter sales, and Biocine, which had $16 million in sales.Chiron product sales totaled $184 million, compared to $46 millionin the first quarter of 1994.

The revenues of $218 million easily eclipsed the earlier record of$134 million, reported in the fourth quarter of 1994. But write-downsin that quarter related to equity investments resulted in a net fourth-quarter loss of $4.2 million, or 13 cents per share.

The charges related to the Ciba partnership were expected, as thecompany had estimated they would be between $275 million and$325 million. Also as expected, Chiron's payments from ScheringAG, of Germany, for Betaseron decreased because of a changeover inrevenue recognition. Chiron now gets a partial payment uponshipment of Betaseron to Schering's U.S. affiliate, and part based onnet sales of the product. Chiron made no Betaseron shipments in thefirst quarter because its partner had adequate supply, and had $1.8million in revenues, compared to $10.6 million in the first quarter of1994.

Chiron Vision ophthalmic product sales increased to $24 million inthe quarter compared to $22 million a year ago. That was attributedto the May 1994 acquisition of Domilens SA, an intraocular lensmanufacturer that had $6 million in first-quarter sales.

Sales of oncology products in the U.S. and Europe increased to $13million from $8 million in the first quarter of 1994, and sales ofbranched DNA probes increased to $4 million from $1 million a yearago. That primarily was due to higher shipments of Quantiplexhepatitis C tests to its Japanese partner.

Research and development expenses increased to $99 million, from$38.4 million in the first quarter of 1994. Ciba Corning and Biocineexpenses accounted for $21 million of that increase.

Chiron reported cash, cash equivalents and marketable securities of$336.7 million on March 31. It consumed $57 million in cash andinvestments in the quarter. Chiron has about 40 million sharesoutstanding.

Chiron released its earnings after the market closed Monday. Its stock(NASDAQ:CHIR) ended the day at $52.25, up 50 cents.

-- Jim Shrine

(c) 1997 American Health Consultants. All rights reserved.

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